Can I get a reverse mortgage with bad credit?


Q. My wife and I are interested in the reverse mortgage. My wife is 72 and her income from a small pension and Social Security is $1,000 per month. Her credit is good enough for loan programs. I’m 65, I still work and I also receive Social Security. Our total monthly income is $4.500. My credit is not too good. We have lived in this home 35 years and owe $74,000 on it. The value is around $250,000. We want to stay in the home and do improvements using a reverse mortgage to access about $45,000. Is that an option with my so-so credit?
— Hopeful

A. Before you enter into a reverse mortgage agreement, it’s important that you and your wife understand exactly what you’re getting into.

As for qualifying, it will depend.

Reverse mortgage lenders will collect credit scores for both spouses, said Jody D’Agostini, a certified financial planner with Equitable Advisors/The Falcon Financial Group in Morristown.

They will look at the median score for each, she said, and if your score is below 620, you may have a tough time qualifying.

D’Agostini said you may have to wait and try to repair your credit.

“Reverse mortgages require that both parties have good credit, but there should be no late payments for at least 24 months for any expenses related to your home such as property taxes, homeowner’s insurance and mortgages,” she said. “There is a chance that you could currently get the loan now, but they might require you to set aside enough money to pay your property taxes and insurance.”

It is also possible to just have your wife apply for the reverse mortgage leveraging her credit, she said.

“This can only happen at age 62 or above,” she said. “Since she is older, this might allow you to borrow more.”

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This story was originally published on Nov. 8, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.